Service tax for buying property

Hi, I have purchased a flat two years back and paid service tax as per the applicable rates at that time. I recently had discussion with the builder to allow me to shift to other flat. While builder allowed me to shift to other flat in same building, he is asking me to pay differential service tax amount on the amount paid in 2013. Can someone help me with the nitty gritty of service tax for buying property? Thanking in anticipation. more

Yes , you have to pay service tax as mentioned by other friend . Your doubt is whether you have to pay any service tax for the changing of new flat. Now the question is what is the cost difference between those two flats. If it is more naturally you have to pay to the builder ,in tern he will adjust the service tax earlier paid from his account. if less he has to return the difference. Hope I may be correct. more

If you are not paying any amount now for shifting the flat, no monetary transaction is taking place, you have already paid the service tax for the previous flat, now you are only changing it without involvement of any money, since there is no transaction of money ,in my opinion no extra service tax is now payable. you are taking the possession on retrospective effect. It may be said out of context that India has accepted against double taxation by enacting double taxation avoidance treaty and where as there is a provision as Article 14 a fundamental right which envisages equality before law, then how can be a citizen be taxed double. more

Well Rama, It does not matter whether we are aware or not, but service tax is being levied in construction work provided by Builder. It is not 14% but it is 4.2% (30% of 14%) which is substantial amount considering the real state cost in our country. Government will not spare anyone on whatever any individual do. :) more

I was not aware that buying a flat attracts service tax. There would be registration fee proportionate to the value of property purchase declared. So, why should there be service tax for buying property?

If the builder is providing maintenance service, then it is understandable if service tax is levied.

Is there any exemption of income tax on the amount of purchase?If not, the purchase value attracts:

1. Income tax which also has a service tax and education cess component,

I paid X amount with 3.71% ST in 2013 and now I discussed with builder to move to other bigger flat. Builder is saying that he will cancel the existing booking and do new agreement for the new flat. Since new flat's agreement is as of today, he is asking to pay differential amount of ST on amount X as well. It is additional 0.49% to male it 4.2%. While my arguement is that I am not paying you any amount now and whatever amount I paid earlier, you must have already paid to government. When there is no payment, why should I pay ST differential on earlier paid amount. Is ST charged on date of agreement or date of payment? more